Worked Example
International-Fund vs India-Equity: which builds more wealth over 15 years?
Scenario
Anjali, age 35, mid-career marketing manager in Mumbai, ₹18 lakh annual income, married with one child, ₹70K monthly household expenses
Inputs
- Years
- 15
- Amount INR
- 5,00,000
- India-Equity tax %
- 12.5
- India-Equity return %
- 12
- International-Fund tax %
- 12.5
- International-Fund return %
- 10
Calculation
- 1.
International-Fund effective post-tax rate
10% × (1 − 12.5% tax) → 8.75%
- 2.
India-Equity effective post-tax rate
12% × (1 − 12.5% tax) → 10.5%
- 3.
International-Fund corpus at year 15
₹5L × (1+0.087)^15 → ₹17.60 L
- 4.
India-Equity corpus at year 15
₹5L × (1+0.105)^15 → ₹22.36 L
- 5.
Wealth difference
|1759580 − 2235652| → ₹4.76 L
Conclusion
India-Equity wins by approximately ₹4.8 lakh over 15 years — driven by return rate.
Tradeoffs
Post-tax real returns matter more than nominal headline rates. India-Equity loses more to taxation. Risk profiles differ too — guaranteed vs market-linked. Adjust for risk tolerance.